Recession Could Cut Solar Industry in Half by 2010

solar panels installation photo

Photo: Flickr, CC

Dark Times Ahead: 50% of Manufacturers Might Not Survive Next Year

These are tough days for makers of solar cells. While we rejoice that the cost of solar panels is going down fast, bringing closer the day when more of our power can come from the Great Big Fusion Reactor in the Sky, solar cell manufacturers are getting a double-whammy: Lower prices combined with lower demand (mostly because of the economic recession) are making them bleed red ink. Things are so bad that a market research firm is predicting that "50% of existing solar manufacturers may not survive 2010".

Read on for the details.The Information Network reports (via DigiTimes) that there is a "massive inventory buildup and huge overcapacity" and that because of this "inventory is averaging 122 days in 2009 versus 71 days in 2008. Capacity utilization dropped to 27.9% in 2009 from 48.0% in 2008."

This is probably mostly because during the boom years, a lot of new solar cell manufacturing capacity was built, especially in China, and just as this new capacity was coming online, the recession hit and demand slowed down quite a bit, leaving prices nowhere to go but down.

Clouds on the Horizon

"Average selling prices could drop below US$1 per watt in 2010 and US$0.50 in 2011. As many as 50% of the more than 200 solar manufacturers, mired in red ink with current selling prices above US$2.00 per watt, may not survive, The Information Network stated."

solar industry data image

Via The Information Network, DigiTimes

More Solar Power
First Solar to Build 250MW & 300MW Solar Farms in California, Enough to Power 170,000 Homes
Prometheus Institute Study: Solar Power to Reach Grid Parity in U.S. in 2015
Improved Solar Power Dish with Stirling Engine Made by Car Parts Suppliers

Related Content on